THE ROLE OF INSTITUTIONAL DISTANCE, BUSINESS GROUP AFFILIATION AND OWNERSHIP LEVEL IN CROSS-BORDER M&As OF TURKISH FIRMS
Institutional environment has become a key phenomenon for internationalization studies of
emerging market firms. As the presence of emerging market firms has increased in global economy, the
investigation of the impacts of institutional environment on internationalization has become vital. The
aim of this study is to examine the impacts of formal and informal institutional environment differences
and business group affiliation on the choice of ownership level in cross border merger and acquisitions
of Turkish firms. The study has analyzed 280 completed cross border merger and acquisitions of Turkish
firms between years 1987-2018. As the formal institutional distance increases, Turkish firms prefer lower
level of equity ownership. In contrast, Turkish firms prefer higher level of ownership as the informal
institutional distance increases. Moreover, business group affiliation has a mitigating effect only in
informal institutional distance and ownership level relationship.
THE ROLE OF INSTITUTIONAL DISTANCE, BUSINESS GROUP AFFILIATION AND OWNERSHIP LEVEL IN CROSS-BORDER M&As OF TURKISH FIRMS
Institutional environment has become a key phenomenon for internationalization studies of
emerging market firms. As the presence of emerging market firms has increased in global economy, the
investigation of the impacts of institutional environment on internationalization has become vital. The
aim of this study is to examine the impacts of formal and informal institutional environment differences
and business group affiliation on the choice of ownership level in cross border merger and acquisitions
of Turkish firms. The study has analyzed 280 completed cross border merger and acquisitions of Turkish
firms between years 1987-2018. As the formal institutional distance increases, Turkish firms prefer lower
level of equity ownership. In contrast, Turkish firms prefer higher level of ownership as the informal
institutional distance increases. Moreover, business group affiliation has a mitigating effect only in
informal institutional distance and ownership level relationship.
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